‘Fear of God’ and their Fear of Counterfeit: Taking Legal Action Against Fake E-commerce Sites

ccraig — Thu, 26 Aug 2021 16:00:22 +0000

Photo by (Pexels)

Meena Alnajar is an��IPilogue��Writer, IP Innovation Clinic Fellow,��and a 2L JD Candidate at��Osgoode��Hall Law School.

��

On July 26, 2021, the fashion brand . The complainant alleges that websites are to sell counterfeit products infringing on the ‘Fear of God’ trademark. With all things moving virtually, we are starting to see new strategies for the counterfeit market. Electronic-commerce, or ‘e-commerce’, is an expedient way for businesses to establish themselves online and create a fruitful marketplace, but it could also act as new vehicle for concealing the counterfeit industry.

Counterfeiting with the intent of using them as valid trademarked items, such as fake merchandise from a well-known brand like, in this case, Fear of God. Online retailers have noted an uncontrollable surge in counterfeit products, with some sources stating that sold online are fakes. In Canada, the punishment for someone or imprisonment for up to five years. However, e-commerce makes conviction trickier in the case of Fear of God’s suit. Web designers can effectively imitate popular online retailers or claim to be resale sites authorized to sell the trademarked items, promoting uncertainty as to which sites are counterfeiters. Fear of God’s claim is driven by the fact that the defendants have concealed their identity and constructed a “counterfeit network” with fake seller profiles. Fear of God’s complaint states that the matter can be amended, if�� “defendants regarding their identities.”

While launching lawsuits may be an effective long-term approach, they may not act fast enough to resolve online counterfeit. Counterfeiters can continue to create e-commerce sites selling counterfeit goods under different addresses and owners. By 2017, major e-commerce site its products sold by marketplace listings of outside sellers, some of which may be counterfeiters. counterfeit craze, stating in their ‘Risk Factors’ section: “Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise… we also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated or stolen goods” and accepts possible criminal liability for counterfeit sales. Although Canada has a in place, legal experts have outlined that the crime requires extensive evidence to warrant a conviction. Federal agents also perform of alleged counterfeit crimes. In the time it takes to obtain evidence and wrap up an investigation, the seller has probably transformed into another web address or online persona.

If the law cannot act fast enough against e-commerce counterfeit, what can? Two avenues may tackle e-commerce counterfeit more expediently. The first is requiring a person behind the e-commerce. India is significantly changing its e-commerce policy to require ’ This nodal person of contact denotes an alternate authority or legal department that can assure proper implementation of all the country’s consumer regulations and e-commerce policy. With a legal source to verify the platform’s content, it may be easier to flag illegitimate or counterfeit sellers in the future. Another avenue is fighting e-commerce with what feeds it: technology and big data. E-commerce giant Alibaba announced the in 2017 and harnesses artificial intelligence (AI) and big data to keep the platform free of fake sellers. The company disclosed that the Alliance’s technological strategy successfully seized of fake goods in 2016. Perhaps fighting e-crime with e-stop-and-seizure is optimal to limit counterfeit products in the online space.

Counterfeit can deteriorate brands as consumers cannot be certain what they are purchasing, but the fight against counterfeit may never stop. Regardless of how counterfeit is combatted, be it through legal action or AI, creating new online businesses, even for unethical purposes, has never been easier.

The post ‘Fear of God’ and their Fear of Counterfeit: Taking Legal Action Against Fake E-commerce Sites appeared first on IPOsgoode.

A Handcrafted Problem: Etsy's share price woes and IP infringement

ccraig — Wed, 24 Jun 2015 16:11:11 +0000

Etsy as a "marketplace where people around the world connect, both online and offline, to make, sell and buy unique goods."��For a site based on creativity and uniqueness, they have a surprisingly��long history of high profile disputes between Etsy sellers and intellectual property owners. Among a myriad of other incidents, sellers have reportedly had problems with , with , and even with the general idea of��.

After Etsy’s April initial public offering (IPO), ValueWalk reported that a�� examined the listings. The note��determined that greater than 5% of the items listed on the site may involve some form of infringement on intellectual property rights, because the items are counterfeit or use copyright protected material or trademarks without a licence. The note raised the concern that the original IP owners may get serious about policing infringement on Etsy, and that a resulting decrease in listings could impact Etsy’s revenues. Etsy stock tumbled after the note was released. Shareholders have launched a suit��claiming Etsy in their IPO prospectus.

The Wedbush research note listed a variety of well known brands and detailed��the number of items search results that appeared to use the intellectual property of other brands. At the top of the list was Disney; the search found over 700 thousand items using Disney's characters and marks.�� Sports leagues, comic books companies, toy and game companies, bands, and TV shows also made it onto a list that totaled over 2 million items.

Luria and Turner were careful to note that they could not be certain��that any of the items found in their searches were definitely infringing. The��individual brands would have to examine the items to determine authenticity of vintage items or infringement by handcrafted items. However, they reviewed a sample of listings and even purchased some items to check for the expected trademark indicators or licensing information and did not find evidence from those samples that intellectual property was being used with permission.

Neither the Wedbush note nor the shareholder lawsuit contend that Etsy is itself liable for the infringement. The Wedbush note cites the precedent regarding secondary liability established by the US 2nd Circuit Court of Appeals in (to read more about this case, see IPilogue post ).�� While eBay had general knowledge of��counterfeit Tiffany items being sold on their site, they did not have specific knowledge about��which particular items were infringing and the court found that they could not be expected to determine on their own if a given item was infringing. eBay had a program for responding to IP owners' complaints and the court felt��that was sufficient to shield them from secondary liability. The court also rejected an argument from Tiffany that eBay had an incentive to be willfully blind to the infringing listings since they earned revenue based on the listings and sales, noting that eBay had to deal with unhappy customers when items were determined to be fake and that the sale of counterfeit items reduced the reputation of eBay with buyers.

The circumstances are similar for Etsy. Etsy has a general that is based on requirements for service providers under the Digital Millennium Copyright Act. While they may not actively police items, they do respond to complaints by IP owners. The disincentive to allow counterfeit items may be stronger for Etsy than for eBay, because authenticity is��such an important element of Etsy's brand. They mention authenticity in their corporate��and describe it as a cornerstone of their brand in their .

Etsy also addressed��infringing content in the��prospectus. A section is devoted to the risk��that Etsy "may be subject to claims that items listed in our marketplace are counterfeit, infringing or illegal.” It discusses the possibility that they would not be able to allow the infringing listings, although it does not explicitly mention the potential revenue impacts of losing those listings. It also mentions��the possibility of��liability for secondary infringement��outside of the United States, where the laws may be less favourable to online marketplaces. That is the situation in France, where to Tiffany v eBay was in favour of the plaintiff, , instead of eBay.

Although Etsy may have more infringing items listed than shareholders were aware of when they purchased stock, the claim that they were unaware of the risks associated with infringement may��be difficult to support. Though there were not specific percentages attached, the possibility of infringing items and the risk they pose was clearly identified in the prospectus.

Jacquilynne Schlesier��is an��IPilogue Editor and a JD candidate at Osgoode Hall Law School.

The post A Handcrafted Problem: Etsy's share price woes and IP infringement appeared first on IPOsgoode.

ecommerce Archives - IPOsgoode

‘Fear of God’ and their Fear of Counterfeit: Taking Legal Action Against Fake E-commerce Sites

A Handcrafted Problem: Etsy's share price woes and IP infringement